Variety Club Follies
Elizabeth "Lele" Brown's daughter was born prematurely, and the young mother soon found herself shuttling in and out of hospitals and doctors' offices, immersed in a world of sick and suffering children. Her daughter was a "near-miss SIDS baby," as Brown puts it, who nearly died in her crib twice in one night and subsequently required hospitalization on and off for a year and a half. Gradually, the child recovered, and today is a healthy four-year-old. But the experience left a thankful Brown feeling that she had an obligation to give something back to other children who were hurting.
When a friend suggested she volunteer to help a charity, the Variety Club, throw an Easter party for handicapped children, Brown jumped at the chance. After spending an afternoon with the kids at Tiki Island near Galveston, Brown cried half the way back to Houston.
"This really moved me, and I wanted to be a part of it," she remembers. "I wanted to help make differences in these children's lives."
That's the stated purpose of the Variety Club, an international organization with more than 70 chapters in 20 countries. Stateside, it's known as the "show biz charity," particularly in New York and California, where actors and entertainers are mainstays of the local chapters. The chapters are called "tents," and each tent has its own individual programs aimed at helping needy children.
Houston's chapter, known as Tent 34, was founded in 1949 and has specialized in providing artificial limbs, wheelchairs and funding for a neonatal center at Ben Taub Hospital, among other programs. For Lele Brown, who had endured her own personal ordeal with an ailing child, it seemed an ideal cause to embrace.
Brown applied for the job of assistant to Tent 34's executive director, Laura Rowe, and was eventually hired. But six months later, as she sat in the Variety Club headquarters nervously eyeing a private detective combing the phones for wiretaps, Brown realized there was a lot more than charity work going on in the Kirby Drive office.
A number of people familiar with Tent 34's operations say Rowe had confided to them that she had engaged in a long-term romantic relationship with the Variety Club's board chairman, John Nau III, the head of Anheuser-Busch's Silver Eagle Distributors. According to club sources, Rowe said she brought in the investigator to secure the office's phone after Nau's wife had discovered the relationship.
(When asked by the Press whether she had had a romantic relationship with Nau, Rowe dismissed the question as "ridiculous" and refused to address the subject. The Press repeatedly left phone messages asking Nau to discuss Rowe. Eventually, his secretary at Silver Eagle Distributors responded that Nau, "after some thought," decided not to comment.)
The nature of the relationship between two married people occupying key positions at the charity turned out to be only one of many issues that eventually tore Tent 34 wide open. Its fundraising gala planned for later this year and its radiothon for homeless children would be put on hold. And its big-name board -- including media executive David Saperstein and restaurateur-developer Tilman Fertitta -- are still split into bickering factions, polarized around the strong-willed, charismatic Rowe.
Rowe is gone -- she resigned her $63,000-plus-bonus position under pressure from the club's executive committee two months ago -- but she's a long way from being forgotten at the local Variety Club.
A prolific fundraiser with a pronounced taste for the highlife, Laura Rowe seems to excite passions from all who've had more than passing contact with her. While a group of male Variety Club board members maintain an almost slavish devotion to her and have vowed to return her to her position, another faction -- including Variety Club International vice president Fred Friedman -- can't wait to erase Rowe's shadow from Tent 34.
"The cancer has been removed from the local chapter," declares Friedman of Rowe's forced resignation. He's recommended that the new regime at Tent 34 hire a big-firm auditor and lawyer to help get its house in order.
To Lele Brown, a call from an elderly Pasadena woman to the Variety Club following its last radiothon provided an unforgettable counterpoint to what she saw transpiring at the charity. The woman asked for "Miss Laura," says Brown, and then explained that she was on a fixed income but was so moved by the Variety Club's efforts that she was going to send $5 a month to the chapter. She ended the call by saying, "God bless you."
The call left Brown feeling uneasy. The assistant to "Miss Laura" had watched with growing frustration as Variety Club money was poured into expensive lunches hosted by her boss while wheelchairs donated by Compaq Computers sat at the club's headquarters, undistributed to their intended recipients. Brown said nothing then, but she has plenty to say now that she has left the charity.
"People like this woman, who's sending all she can in an envelope, did not send this money for lunches in fancy restaurants and excessive spending," says Brown. "It was meant to go for the children."
Brown's not alone in that assessment. For years, the local Better Business Bureau has rated the Variety Club's performance as unsatisfactory for spending too much on administration and fundraising and not enough on charity.
Tent 34 got an extension from the IRS and has not yet filed its 1995 tax return, but its 1994 filing showed an income of $909,200 and program services totaling $160,000. The Houston chapter carried a spectacular fund balance of nearly $600,000 into 1995, compared to a balance of $176,300 the previous year. While the most favorable assumption is that much of that money went to program services in 1995, Better Business Bureau executive director Dan Parsons questions why the charity was holding such a massive amount in the bank, instead of passing it out to agencies in a timely fashion.
The answers to questions such as that are now being sought by Variety Club International officials. A recent emergency missive from International president Michael Reilly to all current and former Houston board members asked them to refrain from public comment while the International office investigates the ruckus inside Tent 34. Reilly also appealed for any information trustees could provide relating to an unspecified "serious problem" involving Laura Rowe's association with the charity. By the time his letter arrived, though, the warring factions inside Tent 34 had been strafing each other for months, and the dispute had become a prime topic of gossip in society circles.
At the core of the controversy is Rowe's conduct as executive director. After Nau resigned last December as chairman, or "chief barker" as the position is known in Variety Club parlance, incoming chairman Pat Fant began scrutinizing Rowe's submission of what she has admitted were faulty expense reports to the charity.
The reports add up to a grand tour of Houston's top-ranked restaurants, including The Palm, Brennan's, Tony Mandola's, La Griglia, the River Oaks Grill, Anthony's and others. Accompanying Rowe at times were her sister, friends and, according to Fant, vendors for the charity who had not donated goods or services. The most glaring problem with the reports involved Rowe's listing of Variety Club board members -- including Fant and Saperstein -- as her companions on luncheon dates, when in fact they had not been present at all.
No one disputes that, during her seven-year tenure, Rowe almost single-handedly turned donor contributions to the Variety Club from a slow drip into a torrent. Much of that money did indeed go to aid needy children and agencies that serve them, including Boys & Girls Harbor in La Porte, the Children's Assessment Center, the artificial limb bank of the Texas Institute for Rehabilitation and Research and many, many others. But a good chunk also went to stage the increasingly lavish gala productions and bankroll Rowe's wining and dining. As the board of Tent 34 now tries to pick up the pieces, it is torn between maintaining the high-cost but high-yield money conduit that Rowe built and taking the Variety Club back to its roots as a hands-on children's charity.
The ballroom of the Hyatt Regency was filled to the brim last January 19 with a prime cross section of what might be described as the high society of mercantile Houston -- monied businessmen and women and their spouses mixing a little tax-deductible do-gooding with commercial networking.
The centerpiece of the sixth annual Variety Club Gold Heart Gala was waiflike chanteuse Liza Minnelli, who braved a New York City snowstorm to board Variety Club board member Charles Joekel's private jet and fly to Houston for $150,000 plus band costs. As Minnelli prepared to make her entrance, Laura Rowe basked in the center of attention at a front-row table, along with Chronicle gossipist Maxine Mesinger and her husband Emile. Compaq Computers had purchased another front table, and it was dominated by company chairman Eckhardt Pfeiffer and his companion, Carolyn Farb, a fundraising luminary in her own right. Scattered in the crowd were the Friends of Laura, including her hairdresser and psychiatrist, who were there on some $85,000 worth of comp tickets allocated by the executive director.
When the glitzy evening was over, Rowe had pulled off her second smashingly successful gala in as many years. The Minnelli event netted $370,000 for the charity; the previous year's affair, featuring Frank Sinatra, had done even better, according to Pace Entertainment's Gary Becker. Sinatra charged $200,000, but his appearance, Becker says, raised more than a half-million dollars.
In the view of Becker -- one of the Tent 34 board members who's still fiercely loyal to Rowe -- the successes of the Sinatra and Minnelli galas were a tribute to the executive director's perseverance: "To draw Liza Minnelli out of her house, put her on a private jet and fly her to Houston, do her performance, stay up till three in the morning doing what she does .... For $150 grand to Liza Minnelli, it's not an easy task."
But the cost of the big-name talent made it impossible for the club to satisfy the Better Business Bureau's guidelines that a charity spend at least 75 percent of its income on charity services and less than 25 percent on management and expenses. Former Variety Club treasurer (or "chief dough guy") Bob Ogle, an Arthur Andersen accounting executive, dismisses the BBB guidelines as relatively meaningless. "We don't care about percentage," he says, "we care about how much money we delivered to charity." The drive to raise huge amounts of money, no matter how high the expenses, characterized the Variety Club's approach under Rowe's stewardship.
And while it might not satisfy the Better Business Bureau, Rowe's taste for top-money acts played to the desires of many of the chapter's supporters, some of whom use the charity gala as a means to burnish their own commercial interests. Gregory Patrick, the president of Retention Resources and owner of Tours of Enchantment, says the Variety Club under Rowe provided him with the class and cachet that wins over clients.
"It was the talent that I felt brought the type of people we wanted to promote our company," says Patrick. "Liza Minnelli and Frank Sinatra, that's the kind of thing I wanted front-row seats for my clients. Otherwise, I would have chosen another charity."
The Louisiana-born daughter of a soybean farmer and the mother of three children, Laura Rowe came to Houston 22 years ago from New Orleans with her husband John. Rowe first got into fundraising at the grassroots level, helping raise money for a private Christian school in The Woodlands that her children attended. Then she got serious and approached the Sunshine Kids, a local charity that provides trips and morale boosters for children with leukemia.
A Sunshine Kids official remembers that Rowe was introduced to the group by Rockets forward Jim Petersen, and promptly talked officials into staging a one-day celebrity tennis and golf tournament involving Billie Jean King and golfer John Mehaffey in 1989.
"She came to us as a benevolent 'I love children' type and as a very good personal friend of Petersen," says the Sunshine Kids official. "She was very charming to all the guys, just a very beautiful lady."
In Rowe's recollection, the tournament was a big success that netted $110,000 for the group. But it didn't take long for differences in charity philosophies to emerge between Rowe and the rather Spartan management of the Sunshine Kids, whose idea of a luxurious staff lunch is brown bags at the office rather than pasta at the Grotto. Rowe's work with the charity would soon end.
"It was impossible for her to work with the Sunshine Kids as a volunteer or in any capacity," says the Sunshine Kids official. "If someone's doing things for humanitarian reasons, they usually don't want a lot for what they're doing. If they're doing it with another agenda, they want something for what they're giving to you. It's usually with strings attached, and often when you look at the strings, it's too expensive." She places Rowe among the latter charity types.
During her short-lived relationship with the Sunshine Kids, Rowe met John Nau just as he was assuming the chief barker role at Tent 34. The mustachioed Nau had come from St. Louis, where he was active in the Variety Club tent there. The two had first linked up when Nau provided the beer for the Sunshine Kids golf and tennis classic.
"He was well versed and knew everything about the Variety Club," recalls Rowe. "I knew nothing. He said come to a board meeting and see if you would be interested in our kids." At that time, Tent 34's annual budget was less than $50,000. By the time she awaited the on-stage arrival of Liza Minnelli at the Hyatt, Laura Rowe was in charge of an annual budget of $850,000.
Rowe has plenty of admirers among child-service providers, including Diane Atkins, an occupational therapist and coordinator of the amputee program at the Institute for Rehabilitation and Research in the Texas Medical Center. She left the Variety Club board last year after coordinating its limb bank program.
"I having nothing but good to say about Laura," says Atkins. "I think she was an outstanding leader. I was with the organization since the late '70s, and she and her husband John made a dramatic difference in its operation, its success financially and its far-reaching ability to help the children." Atkins also says she was unaware during her years with the Variety Club of any personal relationship between Nau and Rowe.
The January evening at the Hyatt likely was the high water mark of Rowe's tenure with the Variety Club. Cracks had already begun to fissure her charity empire. Nau had tendered his resignation effective the previous month. According to several Variety Club sources, Rowe told them that Nau's wife had discovered the relationship and had pressured the beer executive to break it off and resign his post as chairman.
Nau left a resignation missive that would have seemed impossibly cryptic to an outsider, but was well understood by the mostly male board: "It is with the greatest personal regret I must write this letter," Nau wrote Pat Fant, general manager of The Buzz, FM radio 107.5, and the next in line to become chief barker. "I don't think it serves any purpose to outline the reasons [for my resignation] as they are rather obvious. No one individual can be a lightning rod that takes away from the real focus of the business."
And with that, the man who had brought Rowe to the charity and encouraged her big-bucks fundraising style was gone. After Fant took over as chief barker, he began hitting Rowe with questions about the minimal office hours she was keeping and what he saw as the sabotage of new programs he had suggested.
Sharon Adams, a part-time public relations specialist and the wife of a prominent heart surgeon, briefly came on the board, but dropped out after becoming alarmed at what she considered to be Rowe's expense-heavy operation.
Bob Ogle, who, as chief dough guy, had approved Rowe's expenses, later stepped down and was replaced by accountant Jon Trevelise.
During the Minnelli gala, the Variety Club's two-person staff of Charlotte Hayes and Lele Brown may have smiled at Rowe from the side table reserved for the lesser lights of the chapter, but they, too, had accumulated a bill of particulars that would eventually be laid in front of an embarrassed and fractious board of directors. Rowe, however, was a long way from being defenseless. When the matter of her job performance came up for discussion before Tent 34's directors, Fant and other critics of Rowe would find she still had plenty of supporters inside the organization.
At Fant's insistence, the Variety Club board's executive committee gathered at David Saperstein's office in a Post Oak office tower on May 8 to discuss Laura Rowe's future. Saperstein, a pioneer of radio traffic reports, found he could do little to avert the collision between warring members of the Variety Club. Saperstein's office is adorned with pictures and figurines of clowns, and the stories that flowed from Variety Club staffers and Rowe herself that day seemed mostly in the spirit of the decor.
In addition to Saperstein and Fant, board members Tilman Fertitta of Landry's Restaurants, Kroger's consumers affairs manager Gary Huddlesten and new dough guy Jon Trevelise sat in on the executive committee meeting. The club's longtime office manager, Charlotte Hayes, was called in and told the men that Rowe showed a distinct aversion to the group's projects involving children. Hayes quoted Rowe as declaring "children's parties are not in my job description." That attitude, Hayes added, led to the alienation of a number of influential volunteers, including Sophie Tomjanovich, the wife of Rockets coach Rudy.
Hayes recounted how Rowe was miffed that Fant had initiated a "gold heart pin campaign" to raise money, and told Hayes, "It needs to fail to teach him a lesson." In an assertion later seconded by Lele Brown, Hayes said Rowe liked to originate her own promotion ideas and tended to ignore other people's suggestions.
Brown told the executive committee that after she had acted on her own to get Clint Black concert tickets for a group of children, Rowe blew up and refused to talk to her for a week. She and Hayes claimed that Rowe was in the office less than five hours a week for her $63,000-a-year salary, but still demanded that all details of the charity's operations be approved by her personally. (Rowe later told the Press that she did much of her work outside of the office, operating out of her home in the morning and using her car phone to conduct business later in the day.)
Next in the dock was Rowe, who explained that she hadn't had time to think about the complaints now unavoidably brought to her attention. The issue of the inaccurate expense reports dominated the discussion, especially since several of the board members present had been falsely listed as Rowe's luncheon companions.
Saperstein, who did not return a call from the Press, noted that the local United Way had received a media bashing for failing to account expenses accurately, and he observed that Tent 34's problems with the Better Business Bureau resulted from its high expenses.
Rowe defended herself before the board with the same explanation she gave the Press two months later: "I have never falsified a document, be it an expense report or any document that I have ever filled out, in my life," she insisted. Rowe went on to explain how she would go four to six months between filing expenses, then collect the credit card receipts she had accumulated and "just put names of board members in there."
"I couldn't remember who I took to lunch," she told the Press. "That's what I did. I'm not saying it was a good thing to do. I'm not saying I would do it again. But it was never a priority for me to fill out expense reports."
After two hours, the meeting in Saperstein's office adjourned, with the group approving a recommendation to seek Rowe's resignation. A week later, the full board met at Willie G's restaurant on Post Oak to consider Rowe's fate.
To demonstrate how seriously he took the issue, Fant began the meeting by tendering his resignation as chief barker, then laid out his case for kicking Rowe out of the tent. He cited the faulty expense reports, a lack of management and her long absences from the office.
The pro-Rowe faction immediately swarmed to her defense. Pace's Becker requested a two-week cooling-off period to reconsider the executive committee's recommendation. Temp agency owner Charles Joekel insisted that Rowe's fundraising abilities were irreplaceable. "If you ask for her resignation, it will be throwing the baby out with the bath water," Joekel argued.
But advisory board member Jim Masucci, who was then Channel 13's president and general manager, knew enough about the media to realize how damaging revelations about Rowe's expense reports could be. According to the meeting minutes, Masucci warned the group he would bail out of the club if funds were being misappropriated. Once again, staffers Hayes and Brown were ushered in to deliver their complaints and concerns about Rowe. Fant then passed out copies of Rowe's expense reports, whereupon board members could see for themselves that she had used their names for expenses they had not incurred. In fact, all the board members present verified that they had never allowed the Variety Club to pay for their meals.
"We fire people for falsifying expense reports," said Masucci, "and I don't see where this situation is any different." He also maintained that Rowe had grown increasingly arrogant in her management of the club.
Then the pro-Laura faction floated several compromises. Becker recommended that she be allowed to continue to chair the annual gala with a $10,000 salary, while Texas Video & Post's Grant Guthrie suggested she resign the executive directorship but retain the title of fundraising director.
The meeting ended with a unanimously approved motion to accept Rowe's resignation. Fant rescinded his own resignation and was authorized to begin looking for a new executive director. But in a signal that it was not ready to abandon the big-ticket fundraising style Rowe had created, the board also authorized Becker to make the financial commitment for yet another high-priced, big-name act for the next Variety gala. This time it would be Barry Manilow, for a cool $125,000.
At the end of the four-hour marathon at Willie G's, Fant thought he had gotten Rowe out of the Variety Club picture for good. So did fellow board member Alan Markhoff, a dentist who also had decided Rowe had to go.
"Although I've never sat on a jury, that's probably what it's like, where things go around and around until you get some closure on it," says Markhoff. "Some of us walked out understanding the closure one way, and others did not understand it that way."
Two weeks later, the stitches on what had seemed a clean surgical excision of the Variety Club's problems began popping. As Pat Fant brought candidates to be interviewed by a board committee, the pattern of questioning made it clear that the pro-Rowe faction was determined to see her reinstated. One applicant characterized the general line of questioning as, "Can you raise money as well as Laura?" She immediately took her name out of contention.
Fant had also had enough. In a blistering resignation letter to board members dated May 30, he claimed that despite the unanimous vote at Willie G's, some members were now talking about reinstating Rowe as the chairwoman of the planned Manilow gala.
"We have been walking on eggshells long enough," wrote the departing chief barker. "What does it take to get fired around here? We have a person who falsifies expense reports, works less than ten hours a week in the office, alienates her staff, manipulates board members against each other for her own purpose and has otherwise behaved inappropriately for a director of a children's charity."
Fant labeled the board's knowledge of the situation "impossible to abide." He closed by warning his former Variety Club buddies that it would be unwise to "veil these facts" from Variety Club International. "I feel they have a right to know how the Houston tent manages its affairs," he wrote.
In the wake of Fant's resignation, the Tent 34 board once again met and named Markhoff as his successor. An affable, earnest man with a blazing smile full of white ivory, Markhoff moved forward with an investigation of the charity's finances and management under Rowe. That angered the former chief dough guy Bob Ogle, leading to his resignation from the board.
"Alan was not interested or focused on fundraising," says Ogle, who is convinced the charity cannot get by without Rowe's golden touch. "I think Laura's involvement in helping Variety is critical to the success of Variety. I just told Alan that, hey, I don't think I can get behind your agenda, and you need people on the board who can."
While the power struggle within Tent 34 has yet to be settled, Markhoff says the charity has to clean its own house before it can resume the high profile role Laura Rowe carved out for it.
"If you're out asking people to give you money and in turn pass it on to agencies that help children," says the dentist, "you have an absolute obligation to be squeaky clean."
Markhoff has hired the accounting firm of Mir Fox & Rodriguez to audit the Variety Club books. The audit should be completed in three weeks. Tent 34 may retain a lawyer as well. Markoff and others in the chapter acknowledge that Rowe and her faction have warned that lawsuits may be forthcoming. Suddenly, the Variety Club follies don't seem so funny anymore.
Laura Rowe was fidgeting over a cup of coffee at the Avalon Drug Company and Diner earlier this month. She had a long way to drive from her home in the FM 1960 area, but was in a booth waiting when the Press arrived. It was supposed to be a one-on-one interview, but Rowe, true to form, had brought her Variety Club guys along for backup.
The slim, dark-haired Rowe is at her best, by all accounts, in dealing with men. A woman who formerly sat on the Variety Club board says she was immediately struck by both Rowe's mastery of the Variety Club "guys" and her clear aversion to the presence of another female in her operating sphere, the board room.
The guys who accompanied her for this working breakfast included two current Variety Club board members -- Gary Becker and Grant Guthrie -- as well as former dough guy Bob Ogle, and Trips of Enchantment owner Gregory Patrick, who has donated a number of trips for the gala auction. Each was ready with testimonials to Rowe or a defense of her actions.
Becker, who did most of the talking for the group, dismissed the issue of falsified expense reports as much ado over a minor error.
"It's not a good thing to put people's names on an expense report when they weren't at the meeting, especially as a nonprofit group," he said. "Basically, it's part of her character that's missing. She can't do expenses. Talking to her husband, she can't even do her checkbook. Is that wrong? Probably. But it's not like she was taking the money for any personal gain."
When the issue of an alleged relationship with John Nau was raised, Rowe brusquely sidestepped the question. "That's ridiculous. Ridiculous. I absolutely won't speak to it. I don't know where you get this."
Yet none of the watching men seemed particularly shocked or even surprised by the question. When Ogle cautiously inquired who might be saying such things, Becker cracked, "You should be at our board meetings." Guthrie chimed in, "He'd love to." A round of nervous "boys will be boys" laughter briefly fluttered over the table.
By this time, the new order at Tent 34 had postponed the charity's radiothon, which had been scheduled for late June, until January. The gala fundraiser with singer Manilow, which had been slated for November, had been canceled. And Laura Rowe's supporters were on the offensive.
"There's a very solid faction in Variety that's together," explained Becker. "Very solid, very rich in financial means, and rich in the ability to make things happen."
The pro-Rowe faction on the board has the majority of the money and the majority of the votes, Becker added. He himself is next in line to be chief barker, should Markhoff be ousted at a future board meeting, and Becker vowed that the first thing he'd do after taking office is fire the staff, which is now down to Charlotte Hayes. The second would be to reinstall Rowe in her rightful place as Variety Club fundraiser. In fact, the promoter predicted that by the time this story was printed, a counterrevolution at Tent 34 would have returned Rowe and the old order back to power.
"We haven't had the come-to-Jesus meeting, of saying, 'Guys, why are we here?' " Becker intoned, his eyes fixed on Rowe. "Are we here to attack the way Laura has managed the operation for seven years? I think not."
Becker and his allies may have the money on the Variety Club board, but the international organization that licenses the tent will have the final say on whether they can continue to operate as a Variety Club.
Told of the possibility Laura Rowe may return for another showstopper, Variety International vice president Fred Friedman paused for a moment. Then he said simply, "I don't think that will happen."
And it hasn't. Yet.
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